Transport Workers' Union of Australia v Toll Holdings Limited t/a Toll Group

[2019] FWC 4664

[2019] FWC 4664

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 739 - Application to deal with a dispute

Transport Workers' Union of Australia
v
Toll Holdings Limited t/a Toll Group
(C2018/4907)

DEPUTY PRESIDENT SAMS SYDNEY, 10 JULY 2019

Application to have the Commission deal with a dispute under the dispute settlement procedure of an agreement – redundancies of Tanker Drivers following a loss of contract – voluntary redundancies sought – selection process – alleged failure to consult – employees unaware of selection criteria – employee swaps not accepted – consultation appropriate but could have been improved – orders not appropriate.

[1] This decision will determine an application filed on 5 September 2018, pursuant to s 739 of the Fair Work Act 2009 (the ‘Act’), by the Transport Workers Union of Australia, (the ‘Union’ or the ‘TWU’), which seeks to have the Fair Work Commission (the ‘Commission’) deal with a dispute in accordance with the Dispute Settlement Procedure (‘DSP’) in an agreement. The agreement is the Toll - TWU Enterprise Agreement 2017-2020 (the ‘Agreement’) and the respondent is Toll Holdings Limited t/a Toll Group (‘Toll’ or the ‘respondent’).

[2] In the originating application, the dispute was said to concern the failure of Toll to properly consult with the Union in respect to the redundancies of a number of its Drivers at its site in Spotswood, Victoria. The Drivers are engaged in the transportation of liquid materials. As the matter evolved, it became apparent that the dispute was really about the effect of a voluntary, then subsequently non-voluntary, selection process involving the employees; one of whom believed his offer of voluntary redundancy should have been accepted, and another who claimed the selection criteria which determined he was to be made redundant, was flawed and/or unfair. In short, they were seeking to ‘swap’ their outcomes.

[3] The consultation process adopted by Toll was as follows:

•  As a result of the loss of a significant Victorian (7-Eleven) contract, Toll decided to reduce its Tanker Drivers by 24.

•  It undertook a merit-based review of its 130 Drivers, and identified the 24 Drivers who scored the lowest in the merit selection. 15 of these had submitted Expressions of Interest (‘EOI’) for voluntary redundancy (‘VR’) and were accepted.

•  The remaining nine were selected for involuntary redundancy, and all but two employees accepted the outcome and left the respondent’s employ, according to the benefits under the terms of Toll’s redundancy package.

•  Two employees, Mr David Thatcher and Mr Steve Gibbs, argue that the voluntary and involuntary selection process was unfair.

[4] In accordance with my usual practice, I listed the dispute for a conference on 2 October 2018. The matter could not be resolved. Further unsuccessful on site attempts to settle the dispute were held, but on 1 February 2019, the Union requested the Commission arbitrate the dispute and sought directions in preparation for the hearing. These were issued on 7 February 2019, and the matter was listed for hearing in Sydney on 17 April 2019, with a video link to Melbourne and Brisbane.

[5] Mr J Cooney appeared for the Union and Ms L Dobson appeared for Toll. At the outset of the hearing, the Union advised it was no longer pursuing a redundancy ‘swap’ and the Union now sought the following orders:

• a determination of the Commission that the respondent failed to consult with its employees or the applicant prior to selecting employees for redundancy;
• a determination that, in accordance with the Agreement, the Respondent ought to have consulted with the applicant and affected employees prior to selecting employees for redundancy; and
• a declaration that the selection of employees for redundancy, insofar as it was effected outside the Company’s obligations under the Agreement, and where employees express a desire for a redundancy swap, is reversed.

Relevant Agreement provisions

[6] This dispute is brought in accordance with Cl 15 – Dispute Resolution Procedure in the Agreement. The DRP reads:

‘(a) In the event that a Dispute arises, and subject to clause 15(b), the Parties will attempt to resolve the Dispute through consultation at the area within Toll's business at which the Dispute arises.

(b) Clause 15(a) will not prevent a Dispute being referred directly to the FWC under clause15(c) where the nature of the Dispute requires the FWC's immediate involvement.

(c) If the Dispute is unable to be resolved through consultation under clause 15(a), or clause 15(b) applies, the Dispute may be submitted to the FWC for conciliation. For this purpose, the action the FWC may take includes:

(i) arranging conferences of the parties or their representatives at which the FWC is present; and

(ii) arranging for the parties or their representatives to confer among themselves at conferences at which the FWC is not present.

(d) If the Dispute is not resolved in conciliation conducted by the FWC, the FWC will proceed to arbitrate the Dispute and/or otherwise determine the rights and/or obligations of the parties to the Dispute. In relation to such an arbitration:

(i) The FWC may give all such directions and do all such things as are necessary for the just resolution of the Dispute. The FWC may exercise powers of conciliation, arbitration and declaratory relief in relation to the Dispute, including all related procedural powers such as those in relation to hearings, witnesses, evidence and submissions.

(ii) The FWC should apply the rules of evidence that would ordinarily apply to a hearing before the FWC under the Act.

(iii) Before making a determination, the FWC will give the parties an opportunity to be heard formally on the matter(s) in dispute.

(iv) In making its determination, the FWC will only have regard to the materials, including witness evidence, and submissions put before it at the hearing and will disregard any admissions, concessions, offers or claims made in conciliation.

(e) The decision of the FWC will be binding on the Parties subject to the following:

(i) There will be a right of appeal to a Full Bench of the FWC against the decision, which must be exercised within 21 days of the decision being issued or within such further time as the Full Bench may allow.

(ii) The appeal will be conducted in accordance with the legal principles applying to an appeal in the strict sense.

(iii) The Full Bench, or a single member on delegation, will have the power to stay the decision pending the hearing and determination of the appeal.

(iv) The decision of the Full Bench in the appeal will be binding upon the parties.

(f) Until the Dispute is resolved by agreement, conciliation or arbitration, the status quo before the Dispute arose will be maintained and work will continue without disruption. No party is to be prejudiced as to the final settlement by the continuance of work in accordance with this procedure.

(g) For the purposes of the procedure outlined in this clause, a Transport Worker may appoint a representative of their choice, which may include the Union. Toll will recognise any representative appointed by a Transport Worker.’

[7] Relevantly, the Union relies on the Consultation on Workplace Change provisions at Clause 14. The clause reads:

‘(a) If Toll is considering workplace changes that are likely to have a significant effect on Transport Workers, it will consult with the Union and any Transport Workers who will be affected by any proposal.

(b) As soon as practicable Toll must discuss with the Union and relevant Transport Workers the introduction of the change, the effect the change is likely to have on the Transport Workers, the number of any redundancies, the persons or class of persons likely to be affected and any reasonable alternatives to the change or redundancy. Toll must discuss measures to avert or mitigate the adverse effect of the change on the Transport Workers.

(c) In addition to the above, where there is a proposed change to Transport Workers' regular rosters or ordinary hours of work Toll must provide information to the Transport Workers about the change and invite the affected Transport Workers to give their views about the impact of the change, including any impact in relation to their family or caring responsibilities.

(d) Toll will give prompt and genuine consideration to matters raised by the affected Transport Workers and the Union about the changes referred to in clauses 14(a), (b) and (c).

(e) As soon as a final decision has been made, Toll must notify the Union and the Transport Workers affected, in writing, and explain the effects of the decision.

(f) In the event that a Dispute arises in respect to any decision, proposal or consideration to effect any change, the parties agree to follow the disputes procedure in clause 15, and until the Dispute is resolved in accordance with that procedure the status quo before the Dispute arose will be maintained and work will continue without disruption.

(g) A reference to a change that is "likely to have a significant effect on Transport Workers" includes but is not limited to:

(i) the termination of the employment of Transport Workers; or

(ii) major change to the composition, operation or size of Toll's workforce or to the skills required of Transport Workers; or

(iii) the elimination or diminution of a significant number of job opportunities (including opportunities for promotion or tenure); or

(iv) the significant alteration of hours of work; or

(v) the need to retrain Transport Workers; or

(vi) the need to relocate Transport Workers to another workplace; or

(vii) the restructuring of jobs; or

(viii) "New Economy" and technological change including changes in work modes, on-demand technology and automation; or

(ix) any variation to the Drug and Alcohol Policy and Procedures.

(h) With the prior approval of Toll and subject to clause 44, the Union may enter Toll's premises in order to consult with Transport Workers regarding a workplace change.

(i) For the purposes of the consultation outlined in this clause, a Transport Worker may appoint a representative of their choice, which may include the Union. Toll will recognise any representative appointed by a Transport Worker.’ (my emphasis)

[8] Clause 14 is to be read together with Cl 26 dealing with Redundancy, which reads as follows:

‘(a) A redundancy occurs in a circumstance where Toll decides that it no longer requires the position that a Transport Worker has been doing to be done by anyone and that decision leads to the termination of the Transport Worker's employment with Toll.

(b) Toll will use redundancy as a last resort. This will include Toll taking all reasonable steps at the relevant workplace to reduce the number of Outside Hires and casual Transport Workers before implementing any redundancies.

(c) In a redundancy situation Toll will:

(i) undertake consultation in accordance with clause 14;

(ii) explore, in consultation with the affected Transport Worker(s) and the Union, opportunities for suitable alternative employment for the affected Transport Worker(s);

(iii) provide such re-training or outplacement support to Transport Workers as may be reasonable in the circumstances; and

(iv) provide Transport Workers with reasonable paid time off to seek alternative employment.

(d) The selection of Transport Workers for redundancies, and the criteria to be applied in making that selection, will be at Toll's reasonable discretion. Selection criteria for redundancies may include:

(i) identification of the skill sets which Toll requires be maintained;

(ii) expressions of interests for volunteers for redundancy; and

(iii) "last on, first off'.

(e) Without limiting Toll's discretion under clause 26(d), where Toll is required to make a choice between Transport Workers as to which will be selected for redundancy then, all other things being equal, Toll will select Transport Workers who have expressed an interest in being so selected.

(f) In the event that a redundancy occurs, and subject to any greater requirement that the NES requires, the affected Transport Worker will be entitled to a severance payment calculated at the rate of 3 weeks pay per year of service, pro rata for incomplete years of service, up to a maximum of 52 weeks pay. For the purposes of this clause, "weeks pay" means the Transport Worker's base rate of pay at the time of termination.

(g) A Transport Worker will not be entitled to receive a severance payment if Toll obtains for them suitable alternative employment. Such suitable alternative employment can include employment with an employer other than Toll but only in circumstances where the new employer recognises all previous service of the Transport Worker with Toll and all employee entitlements are transferred with the Transport Worker to the new employer.

(h) The severance payment in clause 26(f) is in addition to:

(i) notice or payment in lieu of notice in accordance with clause 25; and

(ii) payment for any accrued but untaken leave or days in lieu which are payable on termination.’ (my emphasis)

The Union accepts that the selection criteria are at Toll’s discretion, but this discretion must be exercised reasonably.

THE EVIDENCE

[9] The following persons provided statements and oral evidence in the proceeding:

• Mr Greg Fleming, Organiser, TWU;

• Mr Steve Gibbs, former Driver at Toll;

• Mr David Thatcher, Driver at Toll Liquid Distribution;

• Mr Steven Lee, Human Resources Business Partner at Toll; and

• Mr Peter Tetley, Senior Regional Manager at Toll Energy.

For the Union

Mr Greg Fleming

[10] Mr Fleming has been a TWU Organiser since October 2017 and has been the organiser responsible for the Toll Fuels Spotswood site since the end of 2017. Mr Fleming reviewed his records of the discussions held with Toll from 22 March 2018 in which Mr Tetley, Mr Gibbs, Mr Andrew Dickie and Mr Lee were also present. In his notes, Mr Fleming records that Toll advised in the first meeting that as it had lost the 7-Eleven contract, there would be a need for redundancies of up to 27 Drivers. Mr Fleming did not regard this as consultation, but rather just a ‘heads up going forward’ meeting. The following day, he attended a meeting with Mr Damian Sloan from Toll (now a Commissioner in the Industrial Relations Commission of NSW). The redundancy issue was not discussed.

[11] Mr Fleming said he met again with Toll on-site on 24 July 2018. He believed this to be the first consultative meeting. The meeting was advised that 15 voluntary redundancies had been accepted and further 11 workers would be advised of the possibility of redeployment on the last day of the contract - 31 August 2018. Mr Fleming said that prior to the meeting, he did not know redundancies were going to occur. Mr Fleming raised concerns that to raise redeployment on the last day of the contract would be unfair, given any reorganisation of work and family arrangements would need time. He suggested all staff be advised on the same day that the voluntary redundancies were accepted. This was refused, as was other suggestions he put forward, including offering a bonus if employees remained until the end of the contract, while still seeking other employment. Mr Tetley agreed to provide the Union with the names of the 11 employees, so that it could explore whether Linfox could pick them up. Mr Fleming said there were no other meetings or discussions, despite his numerous attempts to do so, until 31 August 2018. Nothing came of this meeting. He described the lack of consultation as ‘appalling’.

[12] In oral evidence, Mr Fleming described the attempts to meet in numerous phone calls to Mr Tetley, who was in Brisbane, and who at one point, had a son in hospital. The Union also accepted it had some responsibility for the delay, due to the unavailability of the relevant official. He reiterated that discussing redeployment on the last day of the contract was unrealistic and the Company accepted this to be the case. Mr Tetley also acknowledged it was a good idea to have a bonus, to ensure Drivers would stay to fulfil the contract. This option was later rejected. He also believed that providing the names of the 11 Drivers to the Union beforehand, on a strictly confidential basis, was a good idea.

[13] Mr Fleming was shown a Toll document which set out the four selection criteria adopted in the process. He said he only became aware of these criteria on 16 April 2019 (the day before the hearing).

[14] In cross examination,Mr Fleming argued that at least on two of the six matters he had raised, Mr Tetley agreed to take them away and consider them. However, all six options were rejected. Consultation was simply him trying to get Toll to the table. Mr Fleming agreed that at one point he had proposed a redundancy swap between Mr Gibbs (to be made redundant) and Mr Thatcher (whose offer of VR was rejected). Mr Thatcher had wanted to be made redundant to explore further opportunities with an outside business. Mr Fleming believed the swap would not disadvantage Toll, as it was comparing ‘apples with apples’.

Mr Steve Gibbs

[15] Mr Gibbs is currently employed by Bonney Energy Pty Ltd as a Tanker Driver. He was previously employed by Toll from around January 2003, but he had not worked on the 7-Eleven contract. He had been the site delegate at Spotswood.

[16] Mr Gibbs recalled a previous round of redundancies when Toll lost the Woolworths contract in 2015, and around 36 Drivers out of 140 were made redundant. The criteria for selection at the time included speed breaches over 104 km/h and written warnings in the prior 12 months. However, the Union delegates had no input in the selection criteria. Mr Gibbs said that at the time, he had proposed voluntary redundancies as the first step. There were around four meetings about the matter, but Toll management refused to use VRs. Mr Gibbs believed that certain of Toll managers were disappointed at the time that the redundant employees did not include Union delegates or OH&S representatives. This had arisen because Mr Lee did not feel obliged to follow the Toll Heads of Agreement.

[17] Mr Gibbs also referred to other contract losses which did not result in redundancies. These were mitigated by reducing overtime, securing other contracts and picking up work from other companies. When the loss of the 7-Eleven contract was announced, Mr Gibbs suspected it would lead to redundancies. When he and other TWU representatives attended a meeting on 22 March 2018 with Mr Tetley, Mr Dickie and Mr Lee, the input from the Union was ignored.

[18] On 8 May 2018, when Toll formally notified of Driver redundancies, it was said that the selection criteria had been finalised with TWU delegates, despite this, no such input was sought. This was inconsistent with another statement in the notice which said ‘should less than 23 Drivers volunteer for redundancy the same selection criteria (that is yet to be determined) will be used’.

[19] Mr Gibbs did not work on the 7-Eleven contract. He worked on condensate. In fact, he had been congratulated on his work, yet months later he was selected for redundancy (it was a text congratulating all the team for the contract renewal for five years).

[20] Mr Gibbs said that 21 employees put in EOI for VR, but only 15 were selected. He described how the other Drivers he rotated with on the tanker were accepted for VR (Mr Mullins, an OH&S Rep) and another, Mr Thatcher was rejected. Mr Gibbs believed that Toll knew Mr Thatcher might leave because he had another business, so they kept him on and would save on redundancy, if he decided to resign.

[21] Mr Gibbs was told of his redundancy on 31 August 2018. It was his evidence that he did not want to be made redundant and did not (and still does not) know how the selection process was conducted. He had attended a meeting the day before and was given no prior indication that he was going to be made redundant. Mr Gibbs understood that none of the Drivers were aware of the selection criteria, and were confused as to why some stayed and others were terminated.

[22] Mr Gibbs believed he and Mr Thatcher were comparable. Neither of them had any warnings or speeding issues; they did the same work and had the same licences. He asked Mr Fleming to raise the redundancy swap with Mr Tetley, but it was rejected. Mr Gibbs agreed that at the time, Toll provided a list of interstate and local available positions. He understood you could put your name on the list, but there was no guarantee of ongoing employment. This was one day before termination, giving little time to consider the options and leaving them no option, but to accept redundancy. He did not offer to be redeployed. Mr Gibbs said he was disappointed with the treatment he received from Toll and had expected to remain employed for at least another ten years.

[23] In oral evidence, Mr Gibbs was asked about the four criteria in the selection process; teamwork, integrity and trust, safety, and self-motivation or work ethic. This was the first time he was aware of these criteria. Mr Gibbs still believed the process should be ‘last on first off’, notwithstanding this was not how Toll had selected people in the past.

[24] In cross examination, Mr Gibbs confirmed that he did not believe he deserved being selected for redundancy. He agreed he had resigned as a TWU delegate, just before the redundancies and came back soon after. Mr Gibbs said he did not enjoy his current job, which he had been in for the past four to five months.

Mr David Thatcher

[25] Mr Thatcher commenced employment as a Driver with Toll in July 2011. He recalled that in 2016, when Toll lost the Woolworths contract, a number of redundancies occurred, which was based on process which included speed breaches and written warnings. In the latest round of redundancies, Mr Thatcher expressed an interest in VR, as he felt after 10 years, it was a good time to ‘get into something new’ (Mortgage Broking). He volunteered immediately and noted other Drivers gave EOI after the cut-off date, but were still accepted.

[26] Mr Thatcher said he drove the same truck and did the same work as Mr Gibbs. The only difference was Mr Gibbs was the Union representative and because of longer service, would cost Toll ~$20,000.00 more to get rid of him. He accepted they both had minor incidents in their employment records.

[27] Mr Thatcher was rejected for redundancy as he was considered ‘too valuable’ to the Company. He was aware of another employee who was refused redundancy, even though Toll knew he would be moving to Brisbane in the month after the redundancies. He was also aware of a married couple; one of whom was made redundant, and the other wasn’t. Mr Thatcher said that when all the Union delegates and OH&S delegates were made redundant, he volunteered to become the Yard’s Union representative. This involved him attending a meeting with Toll management in which Toll refused to provide the selection procedure for the redundancies. He believed the decision had been taken without proper consultation and input. The meeting descended into a shouting match. Mr Thatcher identified one person on a final warning who was retained, but another with no warnings, was made redundant. He said there were many other examples of inconsistency in the process, which were really ‘attacks on the Union and OH&S delegates.’

[28] In oral evidence, Mr Thatcher said that he first became aware of Toll’s four selection criteria the week before the hearing. He gave a brief indication of what he thought each criterion meant, noting that in respect to Teamwork, they are all single Drivers on one truck. He understood what was meant by working safely and being self-motivated.

[29] In cross examination, Mr Thatcher agreed he was personally disappointed he was not accepted for VR. He agreed he would have received 30 weeks’ redundancy pay. Mr Thatcher acknowledged he was not involved in consultation meetings prior to September 2018; only after he became the Union delegate. In answer to questions from me, Mr Thatcher said he started his private business 18 months ago and for the first 12 months he used his accrued leave to work part time at Toll 2 days, then 3 days a week. However, he cannot now leave Toll to build the business, leaving him in a ‘catch-22’.

For the respondent

Mr Steven Lee

[30] Mr Lee has been employed in Human Resources roles for more than ten years. Mr Lee described Toll’s fuel business, which employs about 130 people as Tanker Drivers in Victoria. Although Drivers are often allocated to specific delivery rosters and customers, this may vary according to contractual arrangements. Drivers are not permanently allocated as 7-Eleven Drivers or BP Drivers. He described the loss of the 7-Eleven contract in March 2018 as resulting in Toll no longer requiring 24 Tanker Drivers in Victoria. On 8 March 2018, the following notice was issued to all Melbourne Staff:

‘Team,

This note is to confirm advice that the business received communication from 7 Eleven that we have been unsuccessful om retaining their business in Victoria.

7 Eleven will enter a new contract with an alternative provider after the cessation of our contract approximately August 2018.

We will be better placed in coming weeks to communicate more about this development, but in the interim offer the following brief summary of the current status:

NEXT STEPS

• As challenging as it may be, we need to maintain a “business as usual” approach across all contracts including 7 Eleven.

• The business has started work on a professional exit strategy with 7 Eleven, the details of which will be communicated as soon as practicable over the coming weeks

• We have also begun reviewing the impact this development will have on our staffing levels and current business structure – again details of which will be advised as soon as possible

We commit to updating all staff as we move through this process and appreciate everyone’s patience and professionalism as we work as quickly as possible to firm up the plan to manage this pending loss.

It is critical to all parts of our business that we remain heavily focused on our daily responsibilities when on the job and our safety and wellbeing is primary.

Regards,

Andrew Dickie

Manager – Fuels Melbourne

Energy’

[31] On 8 May 2018, all Drivers received the following letter which stated, inter alia:

‘The purpose of this letter is to formally notify you that as a result of Toll being unsuccessful in retaining the 7 Eleven fuel contract 23 Tanker Driver positions are to made redundant. Consultation with TWU and Driver Delegates has occurred and a final decision has now been made on the selection criteria on which Drivers will be selected for redundancy. As per the Toll – TWU Enterprise Agreement 2017-2020 (National Agreement) clause 26(d) – Toll has discretion to use the following selection criteria:

(i) Identification of the skill sets which Toll requires to be maintained; and

(ii) Expressions of interest for volunteers for redundancy

Toll will not be seeking to select Drivers for redundancy based on ‘last on first off’.

To further mitigate the adverse effect of this change on Drivers, Toll is now formally calling for expressions of interest for voluntary redundancy. We understand that any decision that any decision on whether to volunteer for redundancy requires considerable thought and as such we will be closing the expression of interest period on Friday 25 May 2018.

In accordance with the National Agreement and in addition to any accrued but unused annual leave and long service leave, a Driver who is given a formal notice of redundancy is entitled to 3 week’s severance for each year of eligible continuous service, pro rata for incomplete years of service, up to a maximum of 52 weeks pay to be paid at the Driver’s relevant Base Rate of pay.

Note: Should more than 23 Drivers volunteer for redundancy, Toll will need to determine further selection criteria before confirming in writing which expressions of interest have been accepted. Expressing an interest for voluntary redundancy does not constitute a formal notice of termination from Toll, nor employee resignation.

Should less than 23 Drivers volunteer for redundancy the same selection criteria (that is yet to be determine) will be used.’ (my emphasis)

[32] Mr Lee said that all Drivers were in the ‘pool’ of Drivers who could submit EOI in VR and then all Drivers were assessed against the same criteria. He said this process was focused on merit based factors, such as Toll values and other metrics, including safety. Operations Managers were charged with allocating scores, which were then averaged into an overall weighting and each Driver ranked accordingly.

[33] Mr Lee set out the consultation undertaken by Toll with the Union. It involved a meeting on 22 March 2018, to advise of the loss of the 7-Eleven contract and the likelihood of redundancies. A formal consultation was held on 24 July 2018, where the following matters were discussed:

(a) the proposed change, being the loss of the 7-Eleven contract;

(b) the number of likely redundancies;

(c) the class of persons likely to be affected, being all Tank Drivers in Victoria;

(d) any reasonable alternatives to the redundancy, being potential redeployment; and

(e) the process that Toll would take in implementing the redundancies including that voluntary redundancies would be confirmed on 27 July 2018 and other redundancy selections on 31 August 2018.

Mr Lee claimed there was little discussion or comment from the Union or the delegates, as there was an acknowledgement that a loss of contract usually meant redundancies.

[34] Mr Lee said that on 27 July 2018, the Drivers who had submitted EOI were advised if they had been accepted or not. 16 were accepted and the remaining 9 Drivers were advised of their redundancy on 31 August 2018. On the same day, the affected Drivers were advised of a list of national Toll vacancies and informed they had until 4 September 2018 to notify Toll, if they preferred redeployment. They were invited to individual meetings with Management to discuss any issues related to their redundancy. Mr Lee said none of the nine Drivers sought redeployment; nor did any of them seek individual meetings with management. The redundancies were processed after 4 September 2018.

[35] Mr Lee confirmed Toll’s redundancy arrangements in the Agreement, including 3 weeks’ pay for each year of service, capped at 52 weeks. Mr Lee claimed that despite a number of discussions between Mr Fleming, himself and others in management about individual entitlements, at no time between July 2018 and early September 2018 had the Union raised concerns about the redundancies, the selection of individuals or the process of implementation.

[36] In cross examination, Mr Lee agreed that the 8 March 2018 memo, did not expressly state there would be redundancies. The effective consultation occurred in the 22 March 2018 meeting. Mr Lee was referred to a letter from Toll to the Union, dated 9 April 2019, which identified the four criteria used for selecting employees for redundancy. He agreed these criteria had not been known to the Union, or the employees at the time. Mr Lee provided his understanding of what each criterion meant. It went to trust where the Drivers are largely unsupervised; volunteering for things they might not ordinarily do (e.g. filling in for a sick Driver); productivity related to dropped loads and shift times. The points ranking from 1-5 were largely from the Operations Managers, followed by a collective management discussion.

[37] Mr Lee understood that a number (maybe one or two) EOI came in after the close-off date due to mail delays. Mr Lee agreed the letter seeking EOI could have been clearer about Toll having discretion to accept a VR or not. Mr Lee said that employment was terminated on 31 August 2018, with notice paid out. He accepted that employees should have time to consider their options. This could have been discussed and considered during the notice period. Mr Lee was asked about a number of specific Drivers and their roles. The number of 9 identified Drivers reduced from 11, as a result of two others resigning.

[38] Mr Lee said he was unaware of the four selection criteria having been used by Toll in respect to other previous redundancies.

Mr Peter Tetley

[39] Mr Tetley provided further details of Toll’s fuel business contracts. Most contracts are for three to five years and Toll must tender for each contract renewal, against its competitors. He said the loss of the 7-Eleven contract represented 20% of Toll’s fuel business in Victoria. It affected 9 trucks and 27 Drivers (3 of whom resigned prior to the loss of the contract, leaving 24 affected Drivers). It was Mr Tetley’s evidence that the operational performance and employee culture of the fuel business at the time was ‘very poor’. The Company had received negative feedback from customers in relation to the performance, attitude and approach of some of the Drivers which led to a broader poor perception generally of the workforce. This coincided with the loss of the 7-Eleven contract which prompted a selection process for the commercial benefit of the business, based on Toll retaining its best performing employees, in terms of impeccable safety and behaviours aligned to Toll’s values.

[40] Mr Tetley also described the consultation process set out by Mr Lee earlier. I need not repeat it, save for noting Mr Fleming had agreed in the meeting on 24 July 2018, that the information provided was adequate and said words to the effect of ‘there’s not much to talk about here, if you’ve lost the contract, you’ve lost the contract’. Mr Fleming did not make any other specific enquiry about the process.

[41] Mr Tetley received the following email from Mr Fleming on 10 August 2018:

‘Hi Peter,

I hope all is well on the personal front.

Could we look at arranging a meeting to continue with discussions held in the first meeting as we now are aware of the first 15 being told and apparently 6 that volunteered that did not get accepted.

We would like to look at options for the remaining 11 to be on the table before the 31^st as they are meant to have other option available and as they are also totally unaware they may also require support and counselling that is hard to offer on their last day.’

[42] Mr Tetley later spoke to Mr Fleming on a number of occasions to explain why six EOI were not accepted. He said Toll had made a decision to keep its highest performers in light of the site performance. Mr Fleming made no further inquiries, or raised any issue, following this conversation, except for the following.

[43] Mr Tetley said the meeting on 30 August 2018, largely dealt with when employees’ entitlements would be paid. Mr Tetley understood that there had been discussions with Site Managers and Drivers in ‘tool box’ meetings between March and August 2018, but no Driver sought redeployment on individual meetings with Management.

[44] Mr Tetley said that after the redundancies, he had further conversations with Mr Fleming, in which he believed Mr Fleming acknowledged the Union should have been more engaged in the consultation process. Mr Fleming expressed particular concern that Mr Gibbs had been selected for redundancy. He said that although others were upset by their redundancy, ‘this would all go away’ if there was a swap between Mr Gibbs and Mr Thatcher. Mr Tetley made some inquiries, and learnt Mr Gibbs was not in a marginal category; he fell well short of the standards Toll required. Accordingly, the proposed ‘swap’ was rejected.

[45] Mr Tetley believed that all the matters raised by the TWU and the delegates were genuinely addressed. Moreover, the Union did not challenge the process or decisions made, save for what he had mentioned earlier.

[46] In cross examination, Mr Tetley described his understanding of the four selection criteria. Teamwork refers to how a person behaves in the context of the overall site and their interactions with Management, fellow employees, the public and customers. This involves Site Managers and assessments, guided by HR. Mr Tetley believed that Managers were capable of this task, and it was a process Toll had utilised previously. Mr Tetley said the criteria of integrity, trust and safety are self-explanatory. Self-motivation and work ethic refers to how motivated one is in performing their job productively. Mr Tetley could not be precise as to the date he was aware of the four selection criteria being adopted, but he was at all times aware the process was to be ‘merit based’.

SUBMISSIONS

For the Union

[47] In its written submissions, the Union set out the background to the dispute and the relevant Agreement provisions, which I will not repeat.

[48] While the Union accepted that the selection criteria is not mandatory; it is to be applied reasonably. It was said that it would have been reasonable for employees chosen for redundancy to ‘swap’ with employees who wished to accept VR. This was particularly so in circumstances where the emphasis was on seeking EOI from volunteers for redundancy; see: Skinner; Pemberton; Ross; Lucas; Hill; Bryant and Preston v Asciano Services Pty Ltd t/a Pacific National Bulk [2017] FWCFB 574 (‘Skinner’). The failure to accept this option when it was raised by the Union, demonstrated that there was no real consultation, as required by the Agreement and the relevant authorities; see: Construction, Forestry, Mining and Energy Union v North Goonyella Coal Mines Pty Ltd [2015] FWC 4405.

For the respondent

[49] Toll opposed the relief sought by the Union on the following grounds:

(a) The respondent adequately and appropriately discharged its obligations to the Union under the terms of the Agreement, specifically in relation to Cl 14 requiring consultation in relation to workplace change;
(b) The respondent adequately and appropriately discharged its obligations to the employees affected by redundancy;
(c) The respondent adequately and appropriately selected employees for redundancy and reasonably exercised the discretion afforded to it by the Agreement and the Act;
(d) The respondent has discretion to seek applications for voluntary redundancy and approve or deny such applications;
(e) Effecting a reversal of redundancies or a ‘redundancy swap’, as sought by the applicant, is unreasonable and contrary to the public interest, in circumstances where the redundancies were effected in excess of eight months ago;
(f) Insofar as it seeks to effect a redundancy swap, this application is unreasonably being used to circumvent the requirements in the Act that any cause of action challenging the genuineness of redundancies or the selection of individuals on prohibited grounds be brought within 21 days of termination; and
(g) The applicant does not have standing to bring this application or seek relief on behalf of employees no longer employed by the respondent. This is particularly the case in that the applicant is seeking to have the Commission effectively reinstate employees who have long been terminated by way of redundancy.

[50] Toll’s written submissions dealt with the background to the dispute, the evidence dealing with consultation and the selection process. I do not repeat this evidence. It was stressed that the Act makes clear that the process for selecting employees for redundancy is not a matter going to whether there was a genuine redundancy; see: UES (Int’l) Pty Ltd v Leevan Harvey [2012] FWAFB 5241 (‘UES v Harvey’). While this is not an unfair dismissal case, the approach is nevertheless instructive.

[51] Toll put that the terms of the Agreement do not place any obligation on Toll to offer redundancy ‘swaps’. All the employees were reasonably selected on the four criteria based on overall performance. Skinner is not relevant because:

(a) the respondent did not indicate it would be willing, at the outset, to ‘adopt a course involving ‘swaps’’;

(b) in any event, there was discussion between the applicant and the respondent about the possibility of implementing redundancy swaps, which was ultimately rejected by the respondent; and

(c) this was because such consideration would have rendered null and void the reasonable selection criteria that the respondent sought to implement in selection to retain its best performers.

Moreover, there would be no public interest in undoing a reasonable process lawfully undertaken 8 months earlier.

[52] Toll advanced submissions that the grant of relief sought would be contrary to the Act, as the Commission lacks jurisdiction in determining the rights of employees who are no longer employed by the respondent.

In reply

[53] The Union conceded that it no longer pressed for the redundancy ‘swap’ between Mr Thatcher and Mr Gibbs. However, the Union submitted that:

(a) the process meant the selected employees had little or no opportunity to query the merits of their selection;
(b) the respondent did not adequately consult;
(c) the communication were not open and transparent;
(d) it was accepted that the Union could not veto the redundancies, but they were denied an opportunity to change the decision maker’s mind;
(e) there was no evidence of any merit-based calculations used; and
(f) neither the Union nor the employees were ever told of the criteria for selection.

[54] In oral submissions, Ms Dobson observed that the Union seemed to be running arguments in relation to an unfair dismissal or general protections application. This is obviously not a case under either of those parts of the Act.

[55] Ms Dobson said that there was a number of elements to whether Cl 14 of the Agreement was complied with:

(a) There was a discussion with the Union of the change being the loss of contract.
(b) The effect of the change was explained.
(c) The number of redundancies in question.
(d) The persons or classes of persons affected.
(e) Reasonable alternatives were considered, including VRs.
(f) Measures were taken to mitigate the effect of the changes.
(g) Prompt and genuine consideration was given to matters raised by the Union.

[56] By reference to the evidence, Ms Dobson submitted that all of the above elements were undertaken and completed. However, there is nothing in Cl 14 or anywhere else in the Agreement, which requires Toll to consult with the Union about the selection criteria; see: UES v Harvey. Further, the Union had an opportunity to influence the decision maker, and utilised that opportunity. The fact the Union was dissatisfied with the outcome is not the point.

[57] In reply, Mr Cooney addressed the jurisdictional issue raised about the former employees. He noted the Union has its own rights under the Act, and of course, Mr Thatcher remains an employee. Mr Cooney submitted that not only did the employees not know what the four selection criteria were, but neither Mr Tetley nor Mr Lee knew what each criterion involved. Mr Cooney put that it is at least arguable, that three forms selection criteria were issued – one for above 23 EOI, one for below 23 EOI and one for exactly 23 EOI. It was very difficult to have genuine consultation, with such levels of uncertainty and lack information.

CONSIDERATION

[58] ‘Consultation’ and ‘reasonable’ are arguably two of the most frequently contested words in matters relating to the redundancy of employees. Neither are finite terms; they do not involve mandatory, prescriptive or a universal set of guidelines. Importantly, whether consultation is satisfied in a process found in an industrial instrument is not a finding of exact measurement or definitive prism. In short, whether consultation has been complied with, will invariably be viewed from the prism of the ‘eyes of the beholder’. It must be stressed that ‘consultation’ does not mean ‘agreement’, let alone does it permit the veto of one party over another of the consultation process outcomes. In many cases, this misunderstanding subconsciously underpins a person’s judgment that consultation has not occurred and/or was not genuine. An exemplar consultation would result in no proposed redundancies becoming necessary, as the selection process resulted in every displaced employee being either successfully redeployed, and/or employees, who are content with VR, leave the enterprise. Of course, these will be rare cases. However, I am satisfied that in this case Toll was genuine in trying to accommodate an employee’s choice and its process was reasonable; albeit with a ‘few warts’, which I will come back to later.

[59] Just as importantly, consultation requires that it be genuine. Merely paying ‘lip service’ to it will not stand up to scrutiny, and may result in a finding that genuine consultation had not occurred. Consultation must be meaningful, open and transparent, and involve a reasonable, realistic and respectful consideration of each other’s views. Whereas in the past, employers may have claimed they had genuinely consulted when there was no more than a meeting to inform employees of their redundancy and asking for questions, such a perfunctory approach would not be considered acceptable in the present day industrial relations environment, or in the context of the objects of the Act or the express meaning of ‘genuine redundancy’, found at s 389 which reads:

‘389 Meaning of genuine redundancy

(1) A person’s dismissal was a case of genuine redundancy if:

(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and

(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.

(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:

(a) the employer’s enterprise; or

(b) the enterprise of an associated entity of the employer.’

While I accept this definition sits in the unfair dismissal provisions of the Act, it is nevertheless a principle of statutory construction, that a word or phrase in one section of an Act, has the same meaning when it is found elsewhere in the same Act, unless there is a clear intention to the contrary.

[60] The meaning of ‘consultation’ has been the subject of considerable judicial and Commission exegesis. In this respect I refer to the following authorities. The meaning of the word ‘consult’, was considered by the Full Bench in Consultation Clause in Modern Awards [2013] FWCFB 10165 (‘Consultation Clause in Modern Awards’). At [30]-[33], the Full Bench said:

‘[30] The word ‘consult’ means more than the mere exchange of information. As Young J said in Dixon v Roy:

“The word ‘consult’ means more than one party telling another party what it is that he or she is going to do. The word involves at the very least the giving of information by one party, the response to that information by the other party, and the consideration by the first party of that response.” [citations omitted]

[31] The right to be consulted is a substantive right, it is not to be treated perfunctorily or as a mere formality. Inherent in the obligation to consult is the requirement to provide a genuine opportunity for the affected party to express a view about a proposed change in order to seek to persuade the decision maker to adopt a different course of action. As Logan J observed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (QR):

“... A key element of that content [of an obligation to consult] is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. Finally, a right to be consulted, though a valuable right, is not a right of veto.

To elaborate further on the ordinary meaning and import of a requirement to “consult” may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that ?”. Only in the latter case is there “consultation. ...”

[32] We respectfully adopt his Honour’s observations. Similar to the obligation to accord a person procedural fairness, the precise content of an obligation to consult will depend on the context. The extent and significance of a proposed change, in terms of its impact on the affected employees, will have a bearing on the extent of the opportunity to be provided. Hence a change of limited duration to meet unexpected circumstances may mean that the opportunity for affected employees to express their views may be more limited than would be the case in circumstances where the proposed change is significant and permanent. It is also relevant to note that while the right to be consulted is a substantive right, it does not confer a power of veto. Consultation does not amount to joint decision making.

[33] Some of the ordinary incidents of a requirement to consult are reflected in s.145A(2), that is:

● ‘to provide information about the change; and

● to provide an opportunity for affected employees to give their views about the impact of the change; and

● to consider any views about the impact of the change that are given by the employees.’ (my emphasis)’

[61] In Maswan v Escada Textilvertrieb t/a ESCADA[2011] FWA 4239 (‘Maswan’), Watson VP held at [39]:

‘[39] In my view a decision to dismiss on account of redundancy will only be harsh, unjust or unreasonable if the rationale for the decision is seriously undermined or if there is a serious error in the procedure such that renders the termination unfair in the circumstances. Here the decision appears open to the employer to make. The failure to consult is not a trivial matter. But it is clear that consultation was highly unlikely to have negated the operational reasons for the dismissal or lead to any other substantive change, I do not believe that the failure to consult prior to the date of termination rendered the dismissal unfair. Given the evidence in relation to the operational need to restructure, I am of the view that it is likely that Mr Maswan would have been dismissed in any event, even if timely consultation had occurred’ (my emphasis)’

[62] It seems to me that the dispute in this case discloses an all too common, but counterintuitive, approach to consultation where employees who wish to leave the enterprise (usually with a significant redundancy package (as here)) are not selected for VR, and others who do not want to go are selected. Despite Mr Cooney eschewing the pursuit of a redundancy ‘swap’, this was the gist of Mr Gibbs and Mr Thatcher’s evidence and, to my mind, remains the ‘elephant in the room’.

[63] While Mr Cooney relied on the decision of the Full Bench of the Commission in Skinner, in my view, this matter is not ‘on all fours’ with that decision. Firstly, Toll, in this matter, had unashamedly made a deliberate decision to address its concerns with poor business performance and culture, by utilising a process in which it sought to retain its highest performing and best employees. Toll can hardly be criticised for such an approach, which I consider to be reasonable, given the vagaries of contract turnover being a prominent feature within this industry. It hardly needs to be said that when any employer is faced with being forced to make redundancies in order to retain business competiveness, it will look to those employees, within a fixed number, who will best meet its business values and expectations. Unfortunately, this will sometimes mean otherwise good employees will fall below the cut-off point.

[64] Secondly, the ‘swapping’ of employees is an option to be considered, but it is not determinative. So much is clear when the Full Bench in Skinner said at [56]:

‘[56] We agree with Senior Deputy President Hamberger that there is no general obligation for an employer to implement or facilitate a process whereby employees whose positions are redundant can swap with other employees who wish to volunteer for redundancy. An employer who does not implement such a process will not automatically be found to have failed to meet the requirement in s.389(2) of the Act for the redundancy to be considered to be genuine.’

[65] Thirdly, the respondent in Skinner had been willing at some point to accept ‘swapping’. That is not the position here.

[66] Fourthly, the integrity of the respondent’s selection criteria would be seriously undermined, if its outcomes could be simply ignored by ‘swapping’ with unsuccessful employees who had been measured against all the other employees. This would likely create dissent or disharmony.

[67] Fifthly, to have been a fair and reasonable ‘swapping’ option, would have required it to have been implemented at the time, so as to ensure all employees were treated equally. To seek this option for only two employees, many months after the determination of the redundancies, would be inappropriate and unfair to those who were consequentially denied such an opportunity, had it existed earlier.

Suggestions for improvement

[68] On 8 May 2018, Toll informed the Drivers of redundancies arising from the loss of the 7-Eleven contract. I agree that the letter is somewhat confusing, in that in the first paragraph it speaks of a final decision having been made on the selection criteria, yet further down its says ‘Should less than 23 Drivers volunteer for redundancy (the same selection criteria (that is yet to be determined) will be used’. In my view, the letter might have been better worded, but ultimately it does not alter the fact that the Company had determined the selection criteria, as was their right.

[69] I do not consider the Union’s view of the part in the letter in which it is wrongly said the TWU had agreed to the selection procedure, is a reasonable interpretation of that paragraph. The second sentence of the letter is in two distinct parts. It refers to consultation with the TWU and Driver delegates having occurred (which, of course the Union rejects) and then uses the word ‘and’ to separate the words ‘a final decision has now been made on the selection criteria’. While the wording may have been more felicitously expressed, it does not mean that consultation on the ‘final decision’ has occurred, which plainly it had not.

[70] I concur with the Union’s submission that to advise the Drivers of redeployment options on the last day of employment did now allow the Drivers a reasonable and sober opportunity to consider their options. It is little wonder no one took up the offer. It is reasonable to assume that their preoccupations on their last day would have been not on options for redeployment, but what was to happen next and the impact it would have on themselves and their families. In my judgment it would have been prudent and more compassionate to have raised the redeployment options at least a week or two before the last day of employment.

[71] Further, in my opinion, it would have been preferable if Toll had provided the four identified selection criteria to the TWU and the affected employees at the time, and not being forced to do so by a Notice to Produce, dated 9 April 2019. It is not unusual in these situations for the employer to have no qualms in providing its selection criteria to employees and the implementation of a formal review mechanism if an employee disputes their scoring; see: Maritime Union of Australia v Patrick Stevedores Holdings Pty Limited [2014] FWC 2651. That said, I would need to be convinced that the selection process was so fundamentally flawed that it resulted in an unjust outcome; there was no evidence here that this was the case. The Company had a right to select its best performing employees, by its own measurement, and not by an individual employee’s perception of the fairness of the process as it applied to them, or to others. There was no serious challenge to Mr Tetley’s evidence that the site had a poor performance and a culture problem that conveniently could be addressed by the consequences of the loss of the 7–Eleven contract. These decisions and processes invariably involve subjective considerations which, regrettably, are not accepted by everyone. That, in and of itself, does not render the selection process as unfair.

[72] In any event, the Explanatory Memorandum to the Fair Work Bill 2008, and the Full Bench decision in UES v Harvey,plainly set out that the process by which employees are selected for redundancy is at the preserve of the employer, and the Commission would not lightly interfere in that matter.

CONCLUSION

[73] I would also observe that neither the Union, nor any discontented redundant employee challenged their termination of employment as an unfair dismissal by invoking s 389 of the Act. It is somewhat ‘late in the day’ to unscramble what happened almost 12 months ago. In other words, what would be the realistic and practical effect of the Commission finding that consultation had not occurred, in accordance with Toll’s obligations under Cl 14 of the Agreement? Can it seriously be suggested that employees who have long since moved on, could be reengaged (thereby displacing others) by utilising a different selection process, or a reassessment according to the four selection criteria; a fortiori where there was no evidence that a different outcome would be the result. Moreover, putting aside the impracticability of what the Union seeks, it seems to me that if this case is essentially about a breach of the Agreement, then the Union is in the wrong jurisdiction.

[74] It will be seen that I have not considered the totality of Toll’s jurisdictional objections to the relief sought by the Union. This is not because the jurisdictional issues are without merit, or Ms Dobson’s submissions were unpersuasive; rather, the Commission’s decision not to grant the relief sought, lurks in the merits of the argument and the impracticability of unravelling a process, given the passage of time since Toll’s redundancy decisions were made.

[75] Mr Cooney is probably on safer jurisdictional grounds when, in his oral submissions, he put that given the winning and losing of contracts is a reality in the transport industry, the Union does not want a similar lack of consultation in the future. That I can do and what I have attempted to do by the comments I made earlier at [68]-[71].

[76] For these reasons, I decline to make the determinations sought by the Union. The dispute is resolved accordingly.

DEPUTY PRESIDENT

Appearances:

Mr J Cooney for the applicant

Ms L Dobson for the respondent

Hearing details:

2019.

Sydney (with videolink to Melbourne and Brisbane):

17 April

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